Dedication

Dedicate to

My Respected teachers who have taugt

us well and has helped us in making us a better person and have

shapped us to compete in the business world

The deep hearted thanks to Almighty Allah, the most gracious and

generous, who blessed me with potential to complete this project report

successfully. I am especially thankful to our respected teacher “ Sir

Shahid Yaqoob”, the main source of indoctrination of our minds.

He provided me his kind guidance; whenever i approached him with any

problem he guided me for the project. Much regards to my beloved

parents and family members whose guidance and encouragements

accompanied

me at each and every step.

EXECUTIVE SUMMARY

MCB (muslim commercial bank) has solid foundation in pakistion of over 50 years, with a network of over 941 branches, over 750 of which are automatedbranches,over 222 mcb ATMs in 42 cities nationwide and anetwork of over12 banks on the MNET ATM switch.

In this projest I have conducted different matix on MCB to know about the 3 stages of strategy management i.e input stage I which I have conducted EFE and IFE matrix to know about the banks response toward its external and internal factor, which are identified during SWOT analysis. Then in strategy formulation stage I have conducted space,BCG,grand martix to match the strategies with the MCB. For MCB it is found through matrix that penetration (increasing the employess) and diversification strategy(adding new software house) are attractive. To quantitatively measure these strategies I have used QSPM (quantity strategy planning matrix) . and I have finally concluded that although penetration and diversification is attractive but retranchment and diverstiture is approriate for the current condition of MCB.

ABOUT  MCB MCB is one of the leading banks of Pakistan with a deposit base of Rs. 368 Billion and total assets over Rs.500 Billion. Incorporated in 1947, MCB soon earned the reputation of a solid and conservative financial institution managed by expatriate executives. In 1974, MCB was nationalized along with all other private sector banks.  

The Bank has a customer base of approximately 4 million, a nationwide

distribution network of over 1,000 branches and over 450 ATMs in the market.

During the last fifteen years, the Bank has concentrated on growth through improving service quality, investment in technology and people, utilizing its extensive branch network, developing a large and stable deposit base. 

 History

MCB Bank Limited (Formerly Muslim Commercial Bank Limited) has a solid foundation of over 50 years in Pakistan, with a network of over 900 branches, over 750 of which are Automated Branches, over 222 MCB ATMs in 41 cities nationwide and a network of over 12 banks on the MNET ATM Switch, which as a combination is considered to be the core competence of MCB.

MCB has become the only bank to receive the Euromoney award for the fourth time in the last five years. MCB won the "Best Bank in Pakistan" in 2005, 2004, 2003, 2001, and in 2000 the "Best Domestic Bank in Pakistan" awards. In addition, MCB also has the distinction of winning the Asia Money 2005 & 2004 awards for being "The Best Domestic Commercial Bank in Pakistan".

Ten years after privatization, MCB is now in a consolidation stage designed to lock in the gains made in recent years and prepare the groundwork for future growth. The bank has restructured its asset portfolio and rationalized the cost structure in order to remain a low cost producer.

MCB now focuses on three core businesses namely Corporate, Commercial and Consumer Banking. Corporate clientele includes public sector companies as well as large local and multi national concerns. MCB is also catering to the growing middle class by providing new asset and liability products. MCB looks with confidence at year 2005 and beyond, making strides towards fulfillment of its mission, "to become the preferred provider of quality financial services in the country with profitability and responsibility and to be the best place to work".

VISION & MISSION Vision Statement

To be the leading financial services provider, partnering with our customers for a more prosperous and secure future. Mission Statement

We are a team of committed professionals, providing innovative and efficient financial solutions to create and nurture long-term relationships with our customers. In doing so, we ensure that our shareholders can invest with confidence in us.

  VALUES 

INTEGRITY

We are the trustees of public funds and serve our community with integrity. We believe in being the best at always doing the right thing. We deliver on our responsibilities and commitments to our customers as well as our colleagues. 

RESPECT

We respect our customer’s values, beliefs, culture and history. We value the equality of gender and diversity of experience and education that our employees bring with them. We create an environment where each individual is enabled to succeed. 

EXCELLENCE

We take personal responsibility for our role as leaders in the pursuit of excellence. We are a performance driven, result oriented organization where merit is the only criterion for reward. 

CUSTOMER CENTRICITY

Our customers are at the heart of everything we do. We thrive on the challenge of understanding their needs and aspirations, both realized and unrealized. We make every effort to exceed customer expectations through superior services and solutions. 

INNOVATION

We encourage and reward people who challenge the status quo and think beyond the boundaries of the conventional. Our teams work together for the smooth and efficient implementation of ideas and initiatives. 

Products and Services

1. Personal Banking

Deposit Accounts

Khushali Bachat Account Mahana Khushali Bachat.

Pak Rupee Savings Account

Pak Rupee Current Account.

Pak Rupee Term Deposit

Saving 365

Foreign Currency Savings Account

MCB Foreign Currency Term Deposit

Dollar Khushali Account.

 Loan Products

MCB Business MCB Car4u

MCB Pyara Ghar

Easy Personal Loan

 MCB Master Card

 MCB Rupee Traveler's Cheques.

2)Corporate Banking

Cash Management Services Working Capital Loans

Term Loans

Trade Finance Services

3)Online Services

 MCB ATM Services

 MCB Mobile Banking

 MCB Call Center

 MCB Smart Card

 MCB Debit Card

　

4.Virtual Banking

MCB Virtual Internet Banking offers you the convenience to manage and control your banking and finances – when you want to, where you want to. MCB’s Virtual Internet Banking facility is simple and secure. And its free of cost. With MCB Virtual Internet Banking you can access any of the banking services, 24 hours a day, 7 days a week and throughout the year.

MCB Virtual Internet Banking offers a wide range of online services which makes your banking accessible anytime and from anywhere.

 Detailed Account Summary of all listed accounts.  Mini-statements of each of the listed accounts showing recent transaction history

for that account(s).

 Statement-by-Period of each of the listed accounts, based on the period specified.

 Immediate or Scheduled Transfer of Funds between your own accounts, as well as to third-party accounts    setup as beneficiaries, maintaining accounts with MCB.

 Scheduling of ‘One-Time’ as well as ‘Recurring’ Funds Transfers.

 Payment of utility bills for registered Utility Companies.

 Immediate or Scheduled Bills Payment. Scheduling of ‘One-Time’ as well as ‘Recurring’ bill payments. Option   for ‘Full’ or ‘Partial’ payment based on the payment conditions specified by a particular Utility Company.

 Bulk Salary Transfer for Corporate Customers, to facilitate them in paying salary to the corporate employees,   who maintain accounts with MCB.

 Bulk Funds Transfer for Corporate Customers.

 Cheque Book Request for any of your listed accounts.

 Payment/Transfer Alerts for reminding, in advance, prior to the processing of specified payments and    transfers.

 Personal Alerts for reminding of pre-specified events and occasions.

　

.5. Islamic Banking

Deposit Schemes

For customers who are looking for a deposit opportunity where they can purse their funds and reap halal returns on it, we offer the following products:

· Al-Makhraj Saving Account· Al-Makhraj Ianat Account

· Al-Makhraj Term Deposit

Fund Based Facilities

Ijarah Products

MCB’s Islamic Ijarah, analogous to the English term 'leasing’, is based on the ‘Ijarah wa Iqtina’ concept which means the sale of the asset to the lessee after the Ijarah has matured. Types of Ijarah ;Car Ijarah and Equipment Ijarah.

swot analysis

SWOT has a long history as a tool of strategic and marketing analysis. No one knows who first invented SWOT analysis. It has features in strategy textbooks since at least 1972 and can now be found in textbooks on marketing and any other business disciplines. It advocates say that it can be used to gauge the degree of "fit" between the organisation's strategies and its environment, and to suggest ways in which the organisation can profit from strengths and opportunities and shield itself against weaknesses and threats (Adams, 2005). However, SWOT has come under criticism recently. Because it is so simple, both students and managers have a tendency to use it without a great deal of thought, so that the results are often useless. Another problem is that SWOT, having been conceived in simpler times, does not cope very well with some of the subtler aspects of modern strategic theory, such as trade-off

Strength

Determine an organisation's strong points. This should be from both internal and external customer.. It is a

distinctive competence when it gives the firm a comparative advantage in the marketplace. Strengths arise from the

resources and competencies available to the firm.

Weakness

. A weakness is a "limitation or deficiency in one or more resources or competencies relative to

competitors that impedes a firm's effective performance" 

Opportunities

An opportunity is a major situation in a firm's environment. Key trends are one source of opportunities.

Identification of a previously overlooked market segment, changes in competitive or regulatory

circumstances, technological changes, and improved buyer or supplier relationships could represent

opportunities fro the firm.

Threats

A threat is a major unfavourable situation in a firm's environment. Threats are key impediments to the firm's current

or desired position. The entrance of new competitors, slow market growth, increased bargaining power of key

buyers or suppliers, technological changes, and new or revised regulations could represent threats to a firm's

success.

Swot of MCB

Strengths Weakness

Largest private sector bank with a network of 941 domestic and 5 foreign branches.

First bank to privatize,which has now become the leader in market with largest online ATM network in pakistan.

Pioneer in intriduction of MCB master card and RTC.

Good brand name Introduction of mobile

banking made easy for customer.

Easy access to customers at their residential localities through large number of branches.

24 hour cash access through ATM.

Bank’s emphasis on consumer banking by providing them with innovative saving schemes,products and services suiting there life styles.

Large number of customers and deposits.

First bank to launch comprehaensive bil payment facilities like internet banking,ATMs and MCB call centres.

Attention and sensitivity to competition in country.

Mcb instant financing products for customer wanting instant loan facilities.

Extension and improvement in services in domestic as well as foreign.

Customers having accounts,with small amount are not given some services and dealing as large account holders.

Number of branches decreasing because of low profitability.

Job insecurity among employees because of downsizing.

Experienced but old staff who are not aware of know how of modren technologies.

A very small foreign investment

Political pressure from vested interest group.

Financial weakness

Internal political issues

No marketing of advances

Low moral in epmloyess due to low compensation,no database.

Not many advances to agriculture and SMEs.

Very small foreign network.

opportunities SO WO

Focus on small business,export/improt.

The formation of new and energatic marketing teams can increase disbursment of loans and attract new customers

Expand islamic banking

Expansion in foreign countries

Stronger position to recover bad debt.

Information technology

Increase focus on diferent types of customers like opening women banking.

Growing policies of government for business provide MCB with oopertunity to effectively meet with busniess people requirements

Increase ATM withdrawal limit and 24 hr service to remote areas as well

they can capture alarge portioin of market is they expand their branch network and ATMs to other countries

Due to its good brand name MCB can attract new customers and can earn shares in stock exchange.

As MCB is the pineer bank it can attract investment and loyalty from customer\=.

As it is first to launch internet banking and ATMs it can give 24 hr service in differsnt cities and countries.

Due to its long time in business ,experience it has strong position to recover bad debts.

By providing same type of services and dealings to both small as well as large account holders it can increase customer loyalty and number.

By making sound policies it can overcome internal politics and can grow in market

By providing good compensation and job positions and secirity it can get its emploees to work productively

By introducing modern technology for storing data it can save its important information for years

Recruitment of freash and innovative staff can help MCB to grow and compete effectively.

By following good marketing strategies it can in crease its market share.

By good resorce allocation and increasing investment it can recover its financial position.

Threats ST WT

Increasing inflation rates

Privatization of other domestic banks

Highly specialized services provided by foreign banks.

Inconsistancy of government policies.

Uneven treatment with customers.

Growing technological advancement.

Rising customer expectations

Return on deposit is very low

Slower economic rate of country

It has threat from ALFALAH ,UBL and NBP

MCB is pioneer bank and it can use it to minimize threats from new banks.

Due to its long duration in banking sector it has gained goodwill and loyalty which can be used to compete new foreign banks in country.

Experienced staff know more tactics about business by providing them new traing it can grow in market

As it is pioneer in introducing master cards,internat banking and call cantre it can use innovation to meet rising customer expectations.

Training and development of existing employess

Hiering fresh staff and make new compensation policies to motivate employess.

Introducing information technology to compete with new entries

Increase in number of branches in foreign countries to compete with others.

Strategy formulation

1)Input stage

EFE MATRIX

External Factor Evaluation (EFE) matrix method is a strategic-management tool often used for assessment of current business conditions. The EFE matrix is a good tool to visualize and prioritize the opportunities and threats that a business is facing.

Below given is an EFE matrixof MCB where rating is assigned to each external factor to indicate how effectively MCB respond to the factor where:

1 = the response is poor.

2 = the response is below average

3 = above average.

4 = superior

OPPORTUNITIES Weight rank weighted score

Focus on small business,export/improt. 0.02 2 0.04The formation of new and energatic marketing teams can increase disbursment of loans and attract new customers

0.04 2 0.08it can expand its islamic banking

0.06 3 0.18

Expansion in foreign countries 0.07 2 0.14

Stronger position to recover bad debt 0.04 2 0.08

infromation technology 0.05 3 0.15

Increase focus on diferent types of customers like opening women banking. 0.03 1 0.03

Growing policies of government for business provide MCB with oopertunity to effectively meet with busniess people requirements 0.06 2 0.12

they can capture alarge portioin of market is they expand their branch network and ATMs to other countries 0.07 4 0.28

Increase ATM withdrawal limit and 24 hr service to remote areas as well. 0.04 3 0.12

Threats

Increasing inflation rates 0.04 3 0.12

Privatization of other domestic banks 0.06 3 0.18

Highly specialized services provided by foreign banks. 0.04 3 0.12

Inconsistancy of government policies. 0.05 4 0.2

Uneven treatment with customers. 0.06 2 0.12

Growing technological advancement. 0.03 3 0.09

Rising customer expectations 0.05 3 0.15

Return on deposit is very low 0.06 3 0.18

Slower economic rate of country 0.06 2 0.12

It has threat from ALFALAH ,UBL and NBP 0.07 3 0.21

Total 1 2.67

Interpretation

By external evaluation matrix we realize that MCB is perfectly working and making strategies properly.MCB got weighted score of 2.67 for its external opportunities and threat from its competitors,economically,socioaly and politically in all these factors MCB is working in better position and is aware of its threats and opportunities and sorting them out. Besides this score MCB can do better in future and can survive in industry.

IFE MATRIX

Internal Factor Evaluation (IFE) matrixis a strategic management tool for auditing or evaluating major strengths and weaknesses in functional areas of a business. IFE matrix also provides a basis for identifying and evaluating relationships among those areas. The Internal Factor Evaluation matrix or short IFE matrix is used in strategy formulation.

1= MAJOR WEAKNESS

2=MINOR WEAKNESS

3=MINOR STRENGTH

4=MAJOR STRENGHT

strenghts weights rankweighted score

Largest private sector bank with a network of 941 domestic and 5 foreign branches 0.06 4 0.24

First bank to privatize,which has now become the leader in market with largest online ATM network in pakistan. 0.08 4 0.32

Pioneer in introduction of MCB master card and RTC. 0.05 4 0.2

Good brand name 0.06 3 0.18

24 hour cash access through ATM. 0.03 3 0.09

Bank’s emphasis on consumer banking by providing them with innovative saving schemes,products and services suiting there life styles. 0.07 4 0.28

Attention and sensitivity to competition in country 0.04 4 0.16

Mcb instant financing products for customer wanting instant loan facilities. 0.04 3 0.12

Extension and improvement in services in domestic as well as foreign. 0.04 3 0.12

Large number of customers and deposits. 0.07 4 0.28

Easy access to customers at their residential localities through large number of branches. 0.03 4 0.12

Weakness

Customers having accounts,with small amount are not given some services and dealing as large account holders. 0.03 2 0.06

Number of branches decreasing because of low profitabilit 0.03 2 0.06

Job insecurity among employees because of downsizing 0.05 2 0.1

Experienced but old staff who are not aware of know how of modren technologies. 0.05 1 0.05

  A very small foreign investment 0.04 1 0.04

  Political pressure from vested interest group. 0.06 1 0.06

Financial weakness 0.05 1 0.05

 Internal political issues 0.03 1 0.03

Low moral in epmloyess due to low compensation,no database. 0.05 1 0.05

Not many advances to agriculture and SMEs. 0.04 2 0.08

untapped markets due to HR and marketing 0.03 1 0.03

Total 1 2.67

Interpretation

In internal evaluation matrix I conclude that MC is also doing better for its strengths and weakness and trying to work on its weakness and make it opportunities. MCB planning and strategies for its internal factors need more intention and need to be maintained.

SPACE MATRIX

The SPACE matrix is a management tool used to analyze a company. It is used to determine what type of a strategy a company should undertake. TheStrategic Position & ACtion Evaluation matrix or short a SPACE matrix is a strategic management tool that focuses on strategy formulation especially as related to the competitive position of an organization.

The SPACE matrix can be used as a basis for other analyses, such as the SWOT analysis, BCG matrix model, industry analysis, or assessing strategicalternatives (IE matrix

The SPACE matrix is broken down to four quadrants where each quadrant suggests a different type or a nature of a strategy:

o Aggressiveo Conservativeo Defensiveo Competitive

MCB SPACE MATRIX

Financial Strength Rating Average Economic stability Rating Average

Banks revenue increased by 70% 3 Technological changes -4

Banks profits increased by 45% 4

Risk involved in business -2

Return on assets has also increased showing effectiveness of bank in proper utilization of assets. 3 Demand variability -2

Return on equity has also increased 4 Competitive pressure -3

Political instability -4

High inflation -4

Total 14 3.5 -19 -3.17

Competitive advantage Rating Average

Industrial strength Rating Average

Market share -3 Growth potential 4

Product quality -3 Profit potential 4

Customer loyalty -2 Resource utilization 3

Becoming increasingly competitive -3

Increase in competition 3

Total -11 -2.75 14 3.5

Total= FS+ ES

3.5+-3.17=0.33

= CA+IS

-2.75+3.5=0.75

Aggressive strategy

-6

6

Conservative strategy

0.33

-6 Defensive Strategy

-6 -6

0.75

Diversification strategy

Financial strength

6

Industrial

strength

Competitive advantage

Boston consultation group matrix

The BCG matrix or also called BCG modelrelates to marketing. The BCG model is a well-known portfolio management tool used in product life cycle theory. BCG matrix is often used to prioritize which products within company product mix get more funding and attention.

he BCG model is based on classification of products (and implicitly also company business units) into four categories based on combinations of market growth andmarket share relative to the largest competitor.

BCG STARS (high growth, high market share)

- Stars are defined by having high market share in a growing market.- Stars are the leaders in the business but still need a lot of support for promotion a placement.- If market share is kept, Stars are likely to grow into cash cows.

BCG CASH COWS (low growth, high market share)

- Cash cows are in a position of high market share in a mature market.- If competitive advantage has been achieved, cash cows have high profit margins and generate a lot of cash flow.- Because of the low growth, promotion and placement investments are low.- Investments into supporting infrastructure can improve efficiency and increase cash flow more.- Cash cows are the products that businesses strive for.

BCG DOGS (low growth, low market share)

- Dogs are in low growth markets and have low market share.- Dogs should be avoided and minimized.- Expensive turn-around plans usually do not help.

 BCG QUESTION MARKS (high growth, low market share)

- These products are in growing markets but have low market share.- Question marks are essentially new products where buyers have yet to discover them.

MCB DATA

DivisionRelative market share Industry growth rate BCG Matrix

MCB HIGH LOW CASH COW

Coprate banking HIGH LOW CASH COW

Islamic banking HIGH LOW CASH COW

Online services HIGH HIGH STARS

Personal banking HIGH LOW CASH COW

Virtual banking LOW HIGH ?

Interpretation

The mcb bank made substation progress, recording strong growth in revenue and earnings. Mcb is one of the leading banks in Pakistan with the market share of 12.5% in industry. Mcb was once in stars but it didn’t utilize its profits there was a chance of horizontal integration by purchasing RBS shares which wasn’t available due to the problem in rates of the shares. Hence mcb lies in the cash cows. Product development and diversification may be attractive strategies for MCB however retrenchment and divestiture are appropriate.

The Grand Strategy Matrix for MCB

Rapid market growth

Quadrant I Quadrant II

Strong

weak competitive competitive

position Quadrant III Quadrant IV position

slow market growth

The model defines the situation of business through the market growth and their competitive position in the market. There are four quadrants that the business can be categorized into. 

Quadrant I indicates that the firm is in rapid market growth and strong competitive position. Firm can continue concentrating on their current business. However, firm with excess resources may consider vertical integration.

Quadrant II indicates that the firm is in rapid market growth and weak competitive position. Firm needs to evaluate their present approach to the market and identify why the current strategy is not effective. The firm will then adopt the grand strategy options accordingly.

Quadrant III indicates that the firm is in slow market growth and weak competitive position. Firm should decrease resources used by the particular business. Another way is that firm should diversify resources by investing in other businesses in order to expand.

Quadrant IV indicates that the firm is in slow market growth and strong competitive position. Firm have excellent position and can chose to diversify into more highly profitable areas

INTERPRETATION

As MCB is having strong competitive position but the growth rate of banking sector is low in Pakistan, so MCB lies in quadrant IV

REASON

MCB had gotten award of ‘the best bank of Asia’ on providing best services. Govt employees get their salaries from MCB i.e most of govt companies have accounts in MCB. It issues prize bond in local market.

IE MATRIX

The Internal-External (IE) matrix is another strategic management tool used to analyze working conditions and strategic position of a business. TheInternal External Matrix or short IE matrix is based on an analysis of internal and external business factors which are combined into one suggestive model

This IE matrix tells us that our company should hold and maintain its position. The company should pursue strategies focused on increasing market penetration and product development

I.E MATRIX FOR MCB

IFE TOTAL WEIGHTED SCORE

STRONG(3.0-4.0) AVERAGE(2.0-1.99) WEAK(1.0-1.99)

THE 4.0

EFE HIGH(3-4)

TOTAL MEDIUM

(2-2.99) 2.0

WEIGHT

ED LOW

(1-1.99) 1.0

SCORE

INTERPRETATION

AS Mcb EFE Score is 2.67 and IFE score is 2.67 so MCB lies in the V block of the table. Which is hold and maintain. And MCB should implement incentives strategy this include market penetration and product development to do futher better and perfectly and again to move in stars by increasing its growth rates also.

Competitive profile matrix

Competitive profile matrix is an essential strategic management tool to compare the firm with the major players of the industry. Competitive profile matrix show the clear picture to the firm about their strong points and weak points relative to their competitors. The CPM score is measured on basis of critical success factors, each factor is measured in same scale mean the weight remain same for every firm only rating varies. The best thing about CPM that it include your firm and also facilitate to add other competitors make easier the comparative analysis.

IFE matrix only internal factors are evaluated and in EFE matrix external factors are evaluated but CPM include both internal and external factors to evaluate overall position of the firm with respective to their major competitors.

1 2 3

4 5 6

7 8 9

CPM OF MCB WITH ALFALAH BANK

CPM MCB Alfalah bank

weight ratingWtg score rating

Wtg score

Market share 0.15 3 0.45 2 .3

Advertisement 0.10 2 .2 3 .3

Financial position 0.15 2 .3 3 .45

Varity of products 0.05 3 .15 2 .1

International network 0.10 1 .1 2 .2

Online banking 0.15 3 .45 3 .45

Customer loyalty 0.10 2 .2 2 .2

Environment 0.05 1 .05 3 .15

Brand recognition 0.05 3 .15 2 .1

Efficiency of staff 0.10 2 .2 3 .3

total 1 2.33 2.55

INTERPRETRATION

The total weighted score of mcb is 2.35 and that of bank alfalah is 2.55 which is average,which is mainly due to low growth of banking sector in pakistan. The reason for MCB low rate than alflah is due to its dissatisfied employees and old staff who are not updated and hence decrease the productivity.its environment is also not friendly and rigid. Customers are not treatd equally.large account holders are given more services and dealing. On the other hand bank Alfalah has fresh staff and good environment.

3)Decision stage

The quantitative strategic planning matrix

Quantitative Strategic Planning Matrix(QSPM) is a high-level strategic management approach for evaluating possible strategies. Quantitative Strategic Planning Matrix or a QSPM provides ananalytical method for comparing feasiblealternative actions. The QSPM method falls within so-called stage 3 of the strategy formulation analytical framework.

When company executives think about what to do, and which way to go, they usually have a prioritized list of strategies. If they like one strategy over another one, they move it up on the list. This process is very much intuitive and subjective. TheQSPM method introduces some numbers into this approach making it a little more "expert" technique

The Quantitative Strategic Planning Matrix or a QSPM approach attempts to objectively select the best strategy using input from other management techniques and some easy computations. In other words, the QSPM method uses inputs from stage 1 analyses, matches them with results from stage 2 analyses, and then decides objectively among alternative strategies.

Stage 1 strategic management tools...

The first step in the overall strategic management analysis is used to identify key strategic factors. This can be done using, for example, the EFE matrix and IFE matrix.

Stage 2 strategic management tools...

After we identify and analyze key strategic factors as inputs for QSPM, we can formulate thetype of the strategy we would like to pursue. This can be done using the stage 2 strategic management tools, for example the SWOT analysis (or TOWS), SPACE matrix analysis,BCG matrix model, or the IE matrix model.

Stage 3 strategic management tools...

The stage 1 strategic management methods provided us with key strategic factors. Based on their analysis, we formulated possible strategies in stage 2. Now, the task is to compare in QSPM alternative strategies and decide which one is the most suitable for our goals.

QSPM FOR MCB

STRATEGIC ALTERNATIVESMarket

penetration increase

number of employee

relative diversification formation of

software house

OPPORTUNITIES Weight AS TAS AS TAS

Focus on small business,export/improt. 0.02 2 0 - -The formation of new and energatic marketing teams can increase disbursment of loans and attract new customers

0.04 3 0.1 2 0.08it can expand its islamic banking

0.06 3 0.2 2 0.12

Expansion in foreign countries 0.07 4 0.3 3 0.21

Stronger position to recover bad debt 0.04 . - _ _ _

infromation technology 0.05 4 0.2

Increase focus on diferent types of customers like opening women banking. 0.03 3 0.1

Growing policies of government for business provide MCB with oopertunity to effectively meet with busniess people requirements 0.06

they can capture alarge portioin of market is they expand their branch network and ATMs to other countries 0.07 3 0.2 4 0.28

Increase ATM withdrawal limit and 24 hr service to remote areas as well. 0.04 4 0.16

Threats

Increasing inflation rates 0.04 3 0.1 2 0.08

Privatization of other domestic banks 0.06 1 0.06

Highly specialized services provided by foreign banks. 0.04 2 0.1 4 0.16

Inconsistancy of government policies. 0.05

Uneven treatment with customers. 0.06 2 0.12

Growing technological advancement. 0.03 4 0.12

Rising customer expectations 0.05 2 0.1 3 0.15

Return on deposit is very low 0.06 3 0.2

Slower economic rate of country 0.06 2 0.1 2 0.12

It has threat from ALFALAH ,UBL and NBP 0.07 2 0.1 2 0.14

Total 1 1.7 2

strenghts weights

Largest private sector bank with a network of 941 domestic and 5 foreign branches 0.06 4 0.2 3 0.18

First bank to privatize,which has now become the leader in market with largest online ATM network in pakistan. 0.08 2 0.2 4 0.32

Pioneer in introduction of MCB master card and RTC. 0.05 1 0.1 2 0.1

Good brand name 0.06

24 hour cash access through ATM. 0.03 3 0.09

Bank’s emphasis on consumer banking by providing them with innovative saving schemes,products and services suiting there life styles. 0.07 3 0.21

Attention and sensitivity to competition in country 0.04 2 0.1 3 0.12

Mcb instant financing products for customer wanting instant loan facilities. 0.04 2 0.08

Extension and improvement in services in domestic as well as foreign. 0.04 3 0.1 3 0.12

Large number of customers and deposits. 0.07 2 0.1 3 0.21

Easy access to customers at their residential localities through large number of branches. 0.03 2 0.06

Weakness

Customers having accounts,with small amount are not given some services and dealing as large account holders. 0.03 3 0.09

Number of branches decreasing because of low profitabilit 0.03 2 0.1 2 0.06

Job insecurity among employees because of downsizing 0.05 3 0.2

Experienced but old staff who are not aware of know how of modren technologies. 0.05 3 0.2 3 0.15

  A very small foreign investment 0.04 3 0.1 3 0.12

  Political pressure from vested interest group. 0.06

Financial weakness 0.05 3 0.15

Low moral in epmloyess due to low compensation,no database. 0.05 3 0.2 2 0.1

Not many advances to agriculture and SMEs. 0.04 2 0.1 2 0.08

untapped markets due to HR and marketing 0.03 2 0.1 1 0.03

Total 1 1.6 2.18sum total 2 3.3 4.18

Attractiveness Score

Since related diversification (formation of software houses) has greater total attractiveness score, so mcb SHOULD FOLLOW related diversification strategy.

Related diversification strategy

A related diversification strategy seeks to add new but related products and services.

MCB is following related diversification strategy because:

MCB has already excess cash which needs to be invested some where

As the growth of banking sector in Pakistan is low due to many factor i.e inflation,GDP,GNP rates etc,so,it needs to be diversified, to increase market share.

Suggestions

1. Training can be providedwith job rotation so each of employee is capable of doing others work in their absence and in case of emergency.

2. As MCB is earning a lot of profit stock options should be given to employees.3. Workers need more computer training.4. MCB needs to invest more in technology and bring all banking procedure up to

date.5. ATM network needs to be up to dated more to handle transfer,deposite bills,bill

payment and print statements. This will free up a lot of staff work.